Will landlords soon pay National Insurance? What the June 2026 proposal means for your portfolio

No, most landlords do not pay National Insurance on rental income right now, and the headlines from June 2026 do not change that. The story came from a New Economics Foundation proposal, reported in June, which suggested bringing landlords’ rental profits within National Insurance and estimated that it could raise around £3.2 billion a year.

That is not government policy. It is not a consultation. It is not law. It is a think tank proposal, and there is a long road between a policy paper and a line in a Budget. Still, it is worth understanding, because the same reasoning has already shaped tax changes that landlords will pay from 2027. That is where a good specialist landlord accountant earns their fee.

Rental income usually sits outside National Insurance because it is treated as property investment income, not earnings from employment or self-employment. You pay Income Tax on rental profit, but ordinary buy-to-let income does not usually attract Class 4 National Insurance. The exception is where the activity is genuinely a trade, such as hotel-style accommodation or another business that goes beyond normal letting. Our guide on how landlord accounting works from setup to scaling covers where the tax and reporting lines usually fall, and our note on filing your landlord tax return explains how property income is reported.

Why the idea keeps coming back

The Treasury is under pressure to raise revenue, and property income is an obvious political target. The New Economics Foundation’s argument is that tenants often pay rent from wages that have already suffered National Insurance, while landlords pay Income Tax but no National Insurance on the rent received.

You can agree or disagree with that framing, but the numbers explain why the issue keeps returning. There are millions of landlords in the UK, and even a modest charge on rental profits could raise a large sum. For now, though, the government has not put forward a National Insurance charge on rental income.

What has actually changed

The confirmed change is not National Insurance. It is a new set of property income tax rates from 6 April 2027. Under the Finance Act 2026, property income will be taxed at separate rates of 22%, 42% and 47%. These are 2 percentage points above the main Income Tax rates.

The government’s own explanation is important. It says income from assets, including property income, is being taxed more heavily because it does not attract National Insurance. In other words, the National Insurance argument has already influenced tax policy, just through a higher property income rate rather than a new NIC charge. You can read the official GOV.UK explanation of the changes to tax rates for property, savings and dividend income.

What it means for your portfolio

The practical effect of the confirmed 2027 change is modest per property, but it adds up. A landlord with £10,000 of taxable rental profit could pay about £200 more a year. A landlord with £20,000 of taxable rental profit could pay about £400 more. Those figures are before considering the wider effect of other income, allowances, finance cost relief and tax bands.

Stack that on top of Section 24 mortgage interest restrictions, higher stamp duty on additional homes and Making Tax Digital for landlords, and the direction is clear. Our note on the first-quarter MTD checks helps you stay on top of the reporting side.

Limited company landlords do not pay these personal property income rates on company rental profits, because companies pay Corporation Tax instead. That is one reason incorporation reviews are common, though it is not a fix for everyone. Dividend tax rose in April 2026, and moving property into a company can trigger Stamp Duty Land Tax, Capital Gains Tax and refinancing costs. If you are weighing structure, our piece on what a property accountant does is a sensible starting point, and newer investors can use our accounting support for new companies to set things up properly from day 1.

Cash flow discipline matters too. A landlord who treats tax as a monthly set-aside rather than a January shock will find the 2027 rate rise easier to absorb. That habit is central to our landlord cash flow guide. For blocks and managed schemes, our residential property management accounting team applies the same rhythm to service charge budgets, and our outsourced finance team can run the whole cycle if you would rather not.

One more cost sits on the horizon. The High Value Council Tax Surcharge is due from April 2028 for residential properties in England worth £2 million and above, so higher-end portfolios have another charge to model.

Frequently asked questions

Do landlords pay National Insurance on rental income?
Usually no. Ordinary rental income is treated as property income, not employment or self-employment income.

Is the National Insurance change definitely happening?
No. It is a think tank proposal, not government policy or a consultation.

What is actually changing for landlords?
From 6 April 2027, property income tax rates rise to 22%, 42% and 47%.

Could moving to a limited company help?
It might, but it is not automatically better. Corporation Tax, dividend tax, SDLT, CGT and borrowing costs all need modelling.

Plan around what is certain, not the headlines

The National Insurance question may rumble on, but the 2027 rate rise is real and dated. If you want your portfolio structured for what is actually coming, speak to our Nottingham accounting team and we will model the numbers, keep you compliant and help you keep more of your rental profit.

Kellee Quigley

I lead FHP Accounting, an accountancy practice specialising in Commercial and Residential Property Accounting. Our goal is to make the administration of running property portfolios easier for landlords, managers, and investors — allowing you to focus on what you do best, while we take care of everything behind the scenes.